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Revenue and sales down at SIG ahead of annual meeting

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Rachel Reeves’ plans to increase social rents may not “move the dial in a material way” on council house building, a corporate finance firm is warning.
Rachel Reeves’ plans to increase social rents may not “move the dial in a material way” on council house building, a corporate finance firm is warning.

Construction supplier SIG has blamed “challenging market conditions” for a further fall in sales and revenue from 1 January to 30 April.

The firm, which updated markets ahead of its Annual General Meeting taking place on Thursday (2 May), confirmed that sales fell by six per cent to £873m due to both volume and price reductions.

The downturn in sales was driven by a 12 per cent year-on-year fall in demand in SIG’s UK Interiors business, to £171mn, and a 14 per cent drop in demand for housing exteriors in France. 

Sales across the EU were down by 6 per cent overall, while sales in the UK were down by 8 per cent.

The supplier, which operates across much of Europe and was forced to issue a profit warning in October last year, said that while pockets of inflation to its costs persist, they have been more than offset by deflation in other areas.

This has allowed it to make a three per cent reduction to its pricing.

Instead, the firm said struggles were down to sector-wide weak demand in all of its markets and maintained it was performing well against many of its competitors. Fellow construction industry supplier Grafton announced a similar fall in revenue this morning.

The company said it had made progress on “strategic programmes” like modernisation initiatives and restructuring plans, which would help to boost profitability in the second half of the year. 

Gavin Slark, SIG’s chief executive, said: “Whilst conditions are likely to remain a headwind in the short term, our operational agility and discipline is enabling the business to respond effectively, and we are committed to implementing the strategic steps that will drive long term value creation.”

“The actions we are taking now to improve the productivity and cost structure of our operations, during this period of weak demand, will enhance our ability to deliver value as markets recover,” Slark added.

The FTSE 250 materials provider, which posted a loss in its full-year results in March, said it had made several steps to improve productivity and reduce costs that have delivered “meaningful savings”.